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How Things Change

By Floyd Norris January 29, 2009 9:11 amJanuary 29, 2009 9:11 am

DAVOS

Two years ago at the World Economic Forum, there was a lot of talk about whether the International Monetary Fund had outlived its usefulness. In the global prosperity that prevailed then, the I.M.F. had few loans outstanding and thus did not have enough income to support its operations.

There is a different tenor this year. It is making loans, and more countries are lining up. “The I.M.F. does not have enough money for what is coming,” said Guillermo Ortiz, the governor of Mexico’s central bank.

How things change, indeed. On a slightly different note, reading the news this morning it was interesting to read your new president’s comments with respect to the banks and the bonus culture (and the rather less measured “I’d throw them in the brig” from his right-hand man).

Whatever his motivation, altruistic or not, it is a relief that the “financial geniuses” of Wall street have finally burned through their political cover. With the denial that things have got fundamentally screwed up and the people running the show did it while filling their own pockets, finally dispersed, real work can now start, for the first time, to repair the damage.

For the first time in about 4 years, I am optimistic this morning. By the way, well done america on surviving the Bush years – it must have been hard.

Being lectured by Russia and China (and flinching because they are mostly right) is one thing, but, when Mexico and Latvia lecture us we know two things: the world resented W even more than we thought and we’re not in Kansas anymore, but maybe this is just before the dreadful bottom.

It’s well -known that Mexicans and Latvians who emigrated to the US are desperately trying to get back to the homelands. Seriously folks, have you ever met anyone who wanted to emigrate TO China or Russia?

When is the world bank an IMF going to publish some meaningful information such as total debt for nations so that we can all point to countries whose consumers are over reaching themselves like the US, UK and Australia.

When ever debt repayment goes above 30% of GDP, we seem to get a depression. It happened in 1929 and it happened in 2006-07.

The Affordable Care Act imposes economic burdens that are the equivalent of taxes, an economist writes. Read more…

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